Russia Invades Ukraine
Russia’s Invasion: Impact on Cryptocurrency
Russia invaded Ukraine on Thursday via direct orders from President Vladimir Putin. The repercussions have reverberated across the world, along with the proliferation of heartbreaking images of people fleeing their homeland.
Crypto markets tumbled 9% on the news of invasion, while media outlets like the Washington Post call this the “first crypto war” — due to the changed landscape that has has arisen due to cryptocurrency. ATMs have run out of money as Ukrainians rush to get access to their cash, and many praise cryptocurrency because it has enabled them to leave the country with at least some of their savings in hand.
Donations are also flooding into the country, made far easier thanks to peer-to-peer crypto payments. There are even DAOs being set up to raise money that can be distributed in Ukraine according to the wishes of those who hold the DAO’s governance tokens. While some are rightfully skeptical of the legitimacy of some fundraising efforts and whether money is indeed being distributed as promised, there’s no denying that crypto has changed the landscape of donations. While Patreon has shut down some Ukrainian fundraising efforts, the existence of decentralized alternatives means that no one is prevented from sending their money wherever they choose.
This double-edged sword also applies to Russia itself, and some decry bitcoin as an evil tool that will allow the country to escape sanctions.
Flexpool, the world's fifth-largest Ethereum mining pool, blocked Russians from using the platform, “to show solidarity with Ukraine”, but Russian sanctions may have also played a role in this decision. However, if the actions were, as claimed, taken to demonstrate political affiliation, it’s important to note that the actions of a political leader don’t necessary reflect the wishes of the people of that country. Services punishing and vilifying an entire population for the actions of their leader seems to be misplaced retaliation.
Indeed, anti-war protests have erupted in Russia, with thousands of Russians arrestedby police for showing their solidarity with Ukraine.
In Ukraine it’s equally as devastating to see families torn apart: Families trying to flee are intercepted by Ukrainian police, and the men are dragged off. There has been forced conscription for men aged 18-60, and they are banned from leaving the country.
War is a devastating affair, generally instigated by egomaniacs in power, and the people of all sides end up as collateral.
Hopefully one day we can celebrate crypto playing a role in ending war — if enough people opt out of the traditional financial system perhaps it will become impossible for States to raise the funds necessary to instigate them.
Our hearts and prayers go out to all people involved who are hurt by this tragedy.
Huobi Comes Back to the US Because… It Has To
Seychelles-based cryptocurrency exchange, Huobi, is planning to make a comeback to the United States as an asset management firm. Huobi was founded in China in 2013 as a Bitcoin-trading platform, and was the largest digital trading platform in China at the time. It entered the US markets in 2018, but that venture was short-lived — they exited a little over a year later due to the hostile US regulatory climate.
Co-founder Du Jun said:
“We didn’t have a strong commitment to the market at that time, and we didn’t have a good management team in the U.S.”
After China’s crackdown on crypto last year, Huobi lost approximately a third of its revenue. Crypto trading was added to The People’s Bank of China’s (PBOC) Official list of forbidden activities, and this has ironically forced Huobi to go back to the US because of its more welcoming stance on crypto.
In order to do so, however, they are changing their business framework. Du said:
“I expect asset management to be a bigger business than exchange, which echoes the traditional finance market as well.”
One wonders how bad the crypto regulatory environment must be in the rest of the world for a company to consider the US the superior option. Perhaps they determined, as many crypto companies have of late, that the long arm of the US law reaches far and wide regardless of where they are anyway.
OpenSea Navigating Dangerous Waters
An attacker successfully stole from 17 OpenSea NFT marketplace users last Sunday. The attack is suspected of being a phishing scam that aimed to capitalize on the platform’s own plan to upgrade their smart contract: users were sent an official-looking email seemingly from OpenSea and tricked into instead migrating their NFTs into a malicious smart contract that allowed the NFTs to be stolen.
This is the most recent example of a slew of trouble OpenSea has had with hackers. Just last month, hackers exploited an interface bug allowing them to buy NFTs for their far cheaper, previously-listed prices, then flip and resell them for a profit. OpenSea maintained this wasn’t a bug or an exploit, but instead an issue that arises due to the nature of the blockchain. Despite this, OpenSea did reimburse $1.8 million to users hit by the attack.
On top of this, a new lawsuit from a “Bored Ape Yacht Club”-member was just unveiled, seemingly connected to this earlier attack, that claims that OpenSea breached their fiduciary duties and trust.
NFTs have proven to be a lucrative gateway into the crypto world, with scores of new people entering to take part in this digital asset craze. But with this new world comes great responsibility, and many of these newcomers are not as adept at navigating phishing-infested waters. If you’re going to invest in NFTs and other digital assets, you should also take time to invest in learning good computer security hygiene.
We made a video diving into some popular scams for the uninitiated.
Canada Revokes Emergencies Act But Concerns Remain
Canadian Prime Minister Justin Trudeau has revoked the Emergencies Act which he invoked last week in response to Canadian Trucker Protests (read our coverage here).
Trudeau said:
“We’re ready to confirm that the situation is no longer an emergency. We are confident that existing laws and bylaws are now sufficient to keep people safe.”
The Emergencies Act gives the Canadian government temporary unrestricted power to override the rights of its citizens in the interest of national security. It was activated earlier this month when people were protesting vaccine mandates for truckers who re-enter the country from the United States. Canada chose to exercise its power by freezing bank accounts of protestors and anyone donating to protestors. Although reversals have already begun, as people watched the events in Canada unfold, many realized something for the first time — that without due process, the government was able to seize assets and freeze accounts of anyone who would protest government actions. This led to a surge in people who finally understood the value proposition of a decentralized money controlled by individuals rather than intermediaries.
It’s also highlighted the importance of privacy, and especially privacy coins, with crypto donations being tracked and both donors as recipients also having custodial funds frozen. Without fungibility and privacy, true control over your own assets is difficult, if not impossible.
Bitcoin is Good for the Pets!
El Salvador President Nayib Bukele just announced the inauguration of its first National Pet Hospital, paid for by their bitcoin “surplus”.
Construction on the hospital actually began in November in Anitguo Cuscatlán, near the capital of San Salvador, and the new facility will have 12 consulting rooms, 4 emergency units, 4 operating rooms, and several rooms dedicated to rehabilitation, isolation, hospitalization and hairdressing. The inauguration makes good on a promise Bukele made back in October, when he announced that funding for the hospital was made possible by the rising value of Bitcoin, which created a surplus in a government trust fund of $4 million.
One questions the use of the word “surplus”, because El Salvador is actually about $25 billion in debt. Furthermore, in December they announced an additional loan from China to build a 50,000 seat stadium.
By Will Sandoval, NBTV Associate Producer, and Naomi Brockwell.